US – U.S. agricultural commodities trader Cargill Inc is expanding soybean processing capacity at two large Midwest crush plants and increasing efficiency at five other U.S. facilities to meet the growing demand for food and fuel.
The development is happening at a time when leading producer and supplier of specialty plant-based oils and fats Bunge has completed the sale of its refinery located in Rotterdam to Neste
Bunge plans to lease back the facility from Neste in a phased transition through the end of 2024 so that it can continue to seamlessly supply its customers.
Back at Cargill, the expansion of soy processing capacity and modernization of facilities is expected to cost the US commodity trading giant about US$475 million, according to a report by Reuters.
Cargill will boost processing capacity at a Cedar Rapids, Iowa, plant by 10%, with work due to be completed by this autumn.
Upgrades at Cargill’s Sydney, Ohio, facility, originally announced in 2019, will include a doubling of crush capacity and faster loading and unloading of products.
The project’s US$225 million price tag, which was also announced in 2019, is included in the $475 million investment, Cargill said.
Other improvements include automation that will speed up handling of soy products at Cargill crush plants in Guntersville, Alabama; Gainesville, Georgia; Wichita, Kansas; Kansas City, Missouri; and Fayetteville, North Carolina.
The investment comes at a time when U.S. processors are already crushing soybeans at a record pace amid soaring demand for livestock feed.
Soybean prices have scaled to the highest in more than six years as the record crush, and record exports, are projected to shrink U.S. stocks of the oilseed to a mere 9-1/2 day supply ahead of the next harvest.
Cargill anticipates rising demand for food as restaurants and the travel sector emerge from the coronavirus pandemic and for feedstocks to produce biofuels, including renewable diesel.
One driver is trade demand, mainly from China after last year’s truce in the trade war between Washington and Beijing.
When prices began to rise last fall, farmers dumped their stored supply into the market and as a result, U.S. inventories are now relatively low.
Brazil, which produces in the U.S. winter, is expected to have a record crop, but its harvest is delayed somewhat because of rain.
The U.S. Department of Agriculture last month forecast that U.S. farmers will plant more than 90 million acres of soybeans this year, a record.
“We are positioning ourselves to meet the growing global and domestic demand for soy products both in food and fuel markets,” Warren Feather, a managing director for Cargill’s agricultural supply chain unit, said in a statement.
Cargill declined to disclose further details about its crush capacity as it is considered proprietary information but revealed that the projects will be completed over the next five years.
Earlier, Cargill launched a new initiative aimed at helping aquaculture farmers raise products with less environmental impact.
Called SeaFurther Sustainability, the project has set a goal of reducing the footprint of farmed salmon by30% by 2030.
It aims to save two billion kgs of CO2 by that deadline, says Cargill.
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